Mortgage availability increased slightly in July after big drop in June, according to a report published by Mortgage Bankers Association on Thursday.
The MBA mortgage affordability index as a whole rose by 0.3% to 119.1 in July (the index reaches 100 in March 2012; a higher indicator means more availability of mortgages). The regular MCAI increased 0.8%, while the government MCAI was unchanged.
The availability of mortgage loans has jumped to a large extent thanks to the rise in mortgage loans. According to the MBA, of the component indices of the regular MCAI, the giant MCAI increased 3.8%, while the corresponding MCAI fell 3.2%.
“Credit availability improved slightly in July due to an increase in the number of large loan programs,” said Joel Kahn, MBA vice president of economic and industry forecasts. “The overall gain has occurred despite another month of rollbacks for high LTV refinancing programs due to changes in GSE policy.”
The abandonment of refinancing loans with higher LTVs led to a 3% drop in the compliance index, Kahn said. Lenders adding new refinancing loans targeting low-income qualified borrowers Fannie and Freddie reversed declines in the availability of qualifying mortgages.
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In June 2021, there was a rollback in giant ARM offerings from investors, but they rose sharply in July. This has led to a sharp increase in cash and investment houses, Kahn said.
“While the economic recovery is in full swing, total lending remains close to its lowest level since 2014,” Kahn said. “Some borrowers are still on hold from the pandemic and service companies continue to work on possible solutions for these borrowers.”
Mortgage availability fell 8.5% in June to 118.8. This was the lowest MCAI level since September 2020 after more than six months of growth in loan supply.
Mortgage Applications for the week ending Aug 6 surged 2.8% after strong jobs report in July. V U.S. Department of Labor announced 943,000 new jobs, which exceeds the forecast of 865,000 people. This was the highest monthly growth since August 2020.